Ways to Save Money on Health Insurance
When the Affordable Care Act provisions become effective in 2014 and 2015, you may no longer need help saving money on healthcare and health insurance since much of your healthcare needs will be completely covered by insurance. But until the law kicks in and the American public finds out how effective it is, this section will continue to offer suggestions for both those looking for low cost health services and health insurance and for those who cannot afford or qualify for health insurance for one reason or another. It is important to try and get some sort of coverage because hospitals usually charge the uninsured more than four times what they charge the insured. Medical bills can devastate a family's finances. Medical debt is the leading cause of financial collapse in the United States and is responsible for about 800,000 bankruptcies every year. Visit Healthcare.gov to find out what your options will be regarding obtaining your own health insurance or getting subsidized health insurance, but also explore other ways to save on healthcare:
Raise Your Deductible for Big Savings. Raising the deductible on your health insurance policy from $2500 to $5000 can result in a savings of anywhere from 20 to 40 percent. Of course, many people can't afford the $5000 deductible. If you have a lower deductible, say $500, you can still save significantly if you raise it to $1000 or $2500, but raise it if you can because the savings are enormous. Many people can cut their premiums in half.
Save 5 to 10 Percent By Paying Annually for Insurance. If you pay your premiums monthly, you add about 5 to 10% to the cost of the policy since the insurer must do added paperwork. If you pay your premiums semi-annually or annually instead of monthly, the insurance company will decrease your premiums. Similarly, you can also reduce the cost by buying one big policy instead of several small ones. For example, one policy for $500,000 rather than two for $250,000.
Ways to Save Money
COBRA Plan (Consolidated Omnibus Budget Reconciliation Act of 1985). This federal law requires employers to provide medical insurance to employees who are leaving their jobs for up to 18 months after they depart. It can be very expensive and many families cannot afford the $1,000 plus monthly premiums.
Buy a High-Deductible Health Insurance Policy with a Health Savings Account. Those with an above average income might be able to save a significant amount on an insurance policy by agreeing to pay for most of their health costs themselves and have the insurer pay for only catastrophic illnesses. The Tax Code allows these people to deduct the amount they put in a health savings account from their income if they are insured with a high-deductible health insurance policy. The money in the health savings account is used only to pay for routine medical costs. Insurance companies offer significant discounts on annual premiums if you take out a high-deductible insurance policy. The insured benefit in that they are billed for routine medical procedures at the same lower rate that everyone else who has insurance enjoys -- 75 percent less. A person in their twenties might pay $300 per month for health insurance, but if they had a high-deductible health insurance policy with a health savings account, that person would pay only $60 per month. Check out ehealthinsurance.com to compare plans from different insurance companies.
Other ways to cut health insurance costs:
(1) Buy directly from the insurance company rather than through an agent;
(2) Buy group insurance rather than individual policies, meaning buy your homeowner's insurance, car insurance and health insurance from the same agent; and
(3) Avoid insurance that covers only one type of risk (cancer, credit life, flight) as these policies often duplicate your existing policies and are more expensive.